Apple is reportedly preparing to introduce AI-powered search options to its Safari browser — a move that could significantly disrupt Google’s search empire and its multibillion-dollar advertising business, which heavily depends on iPhone users.
The revelation, which surfaced during testimony from Apple executive Eddy Cue in a major U.S. antitrust case against Google, sent shockwaves through financial markets. Shares of Google-parent Alphabet plunged 7.3% on Wednesday, erasing around \$150 billion in market value. Apple shares also dipped, closing 1.1% lower.
According to a source familiar with Cue’s testimony, Apple is “actively looking at” overhauling Safari’s search interface. Cue reportedly noted that Safari search usage had declined for the first time in recent history, with users increasingly turning to AI-powered alternatives.
Google responded by stating that it continues to see overall growth in search queries from Apple devices. “People are seeing that Google Search is more useful for more of their queries — and they’re accessing it for new things and in new ways,” the company said in a blog post, highlighting voice and visual search as key drivers.
Nevertheless, Apple’s reported plans suggest a major shift in user behavior and a potential turning point in the search engine landscape — one that could loosen Google’s grip. Currently, Google pays Apple an estimated \$20 billion annually to remain the default search engine on Safari, a figure that represents over a third of the ad revenue Google earns through the browser.
The U.S. Justice Department has proposed banning such exclusivity deals as part of remedies in its ongoing efforts to rein in Google’s dominance. Analysts warn that the loss of default status on Safari could deliver a heavy blow to Google’s core business.
“Many advertisers rely entirely on Google due to its near-monopoly. If credible alternatives emerge, significant portions of ad budgets could shift elsewhere,” said Gil Luria, analyst at D.A. Davidson.
Despite growing competition, Google is not standing still. After falling behind in the AI race following ChatGPT’s meteoric rise, the tech giant has invested heavily in its own AI tools. It launched an “AI mode” in search earlier this year and recently expanded its AI Overviews feature to over 100 countries, integrating ads into these AI-generated summaries.
At a separate antitrust trial, Google CEO Sundar Pichai revealed that the company hopes to strike a new deal with Apple by mid-year to integrate its Gemini AI technology into iPhones.
Meanwhile, Apple is reportedly planning to offer users alternative AI-powered search providers like OpenAI and Perplexity AI, further challenging Google’s supremacy. According to Bloomberg, Cue mentioned that Apple would begin adding these options in future updates.
“Apple’s move shows just how far generative search engines like ChatGPT and Perplexity have progressed,” said Yory Wurmser, principal analyst at eMarketer. He added that Google’s willingness to spend billions to remain the default option underscores the high stakes involved.
ChatGPT, for instance, reported over 1 billion weekly searches in April and had more than 400 million active users as of February — a figure that illustrates just how real the competition has become.
